The Massive Fall In Price Of Assets And The Faith Of Cryptocurrency
Amidst the turbulence initiated by the Securities and Exchange Commission (SEC) in the cryptocurrency market, following her lawsuit against two giant exchanges, Binance and Coinbase over a week ago.
SEC claimed these exchanges are not registered to operate legally and mentioned Defi tokens and assets that should be considered as securities and regulated as well.
It stared Fear, Uncertainty and Doubt amongst investors (FUD), which lead to a massive liquation of assets and caused the price of crypto currencies to plummet massively.
What is SEC and why the lawsuits against giant Exchanges?
SEC stands for the “Securities and Exchange Commission.” It is a regulatory agency in the United States that oversees and enforces federal securities laws. The SEC’s primary mission is to protect investors, maintain fair and efficient markets, and facilitate capital formation.
On June 5, SEC filed lawsuit against two giant crypto currency exchanges, Binance and Coinbase for failing to register as an exchange or broker dealer and alleging Defi tokens as securities that should be registered.
SEC labeled 10 Cryptocurrencies as securities in its case against Binance and 13 Cryptocurrencies in its case against Coinbase respectively. The assets labeled securities is worth over 10% of the 1.09 trillion total Crypto market capitalization.
Brian Armstrong the CEO of Coinbase sold 29,730 shares of the company a day before SEC lawsuit, avoided a great loss by doing so. The net worth of Armstrong and Binance CEO Changpeng Zhao dropped by $289 million and $1.33 billion respectively.
Following 13 charges against Binance, Binance.US has suspended the deposit of U.S dollar and informed closure of fiat withdrawals on or before 13th of June. The exchange also stated that trading, staking, deposits and withdrawals in crypto remain fully operational.
Binance also expressed its disappointment with the SEC’s lawsuit in a recent blog post and highlighted its dogged commitment to discussing issues with SEC and arriving at a positive conclusion soon.
The faith of Cryptocurrency
The recent happenstances in the cryptospace has lead to a massive downtrend leaving Bitcoin at $25,846 as well as other alternative coins.
The market has been challenged often times since the last bull run in 2021. Despite these challenges, it’s survival is inevitable as it had always done.
Crypto experts believe that the current situation is complicated and the season of full recovery may tarry a little. On the other hand, it is a great opportunity for potential investors to come in and revive the market as it is a good time to buy and hold.
It is a good time to secure your bag right now considering fundamental and technical analysis even as we patiently await the awakening of the market.
Make sure you do your own research and make investment decisions solemnly by your own conviction.
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